Tuesday, June 23, 2009

Forewarned is
forearmed, blah blah blah. For Australian stocks, that's
a tad on the dull side, because when I called for an impending bounce
off
the recent swing low, I made it clear I was not removing hedges
on Australian model portfolios - here is what I said on Feb 22 (with
the DAX at 4016) -

All
we are talking about in this exercise is a bear-market bounce which
will clear a very heavily oversold condition. We are not looking for a
new bull market, and in fact we are not even looking for a bounce which
would be good enough to remove portfolio hedges; Australian markets
have not fallen as far, and will not bounce as far, as either US or
European markets.

The bounce was much stronger than anticipated, but it gave a beautiful
short term counter-short at the DAX target of 4688 before markets
got
an unanticipated second wind.

The second wind was generated by massive, unsustainable
monetary priming, a global co-ordinated jawboning effort worthy of
Goebells, and Hope.

It started to get silly when someone in some marketing
department came up with 'green shoots': once that was turned into an
NBC-ABC-CBS-Bloomberg-CNBC-Fox-CNN-BBC-Sky talking point, it was clear
that (to quote our resident chubby genius from Thursday
June 11) -

The "Dumb Money At Work" sign is being upgraded to a flashing version
with a siren.

The following day (June 12th), in the morning (Asian
time) USRant, I nailed the colours to the mast
again:

Boring, boring, boring. The Dow made a 7-month high (after making a
13-year low in March) and the entire mainswamp media is awash with
pablum about how we're all going to go onwards and upwards from here.
They're wrong: I plan to short the Nikkei today - unlike the DAX short
form last week and the SPI short mentioned on Twitter, the Nikkei short
will not be short-term - it's going to be a 'leg in' to a long-term
short that will probably be held until the end of November. During that
period I'll switch out of Nikkei and into DAX and Nasdaq100, but the
Nikkei is the best vehicle for the moment.

The Nikkei short that I gabbled about in this morning's USRant has yet
to pay off - it's currently underwater by 45 Nikkei points. That's
neither here nor there in the scheme of things - as I mentioned, this
is a leg in to a position trade: target is a new low in global markets.
Tonight I'll scale in a small short in the DAX...

We're not there yet (a new low in global markets) but we've
come along nicely: the Nikkei was 10095 (now 9550) and the DAX was 5098
(now 4693, and having a little bounce tonight).

So next time you're watching 'Trading Day' and you see some
dick repeating the same tired shit about how our parasitic overlords
are getting us out of this mess,turn off your telly and stick a fork in
your own thigh - it will help your portfolio to do so.

Tomorrow - why politicians are worse than smallpox, and should
be eradicated... featuring Berlusconi's near-paedophilia, the 1918 flu,
and some nice detailed comparisons regarding the costs and benefits of
wiping out smallpox versus wiping out politicians.

Major Market Indices

The broad market - the All Ordinaries (XAO)
- slid pretty savagely, posting a loss of 117.8 points (3.01%),
finishing at 3793 points. The index hit an intraday high of 3910.8 at
10:00 am, while the low for the day was 3786.9 - set at 1:07 pm Sydney
time.

Total volume traded on the ASX was 2.21bn units, 4% above its
10-day average of 2.12bn shares.The ASX's daily listing of all stocks
included 1449 different 3-letter FPO's which traded (i.e., had non-zero
trade volume). Of these, 216 issues rose, with volume in rising issues
totalling 305m units; there were 921 declining stocks, which traded
aggregate declining volume of 1.59bn shares.

Of the 497 All Ordinaries components, 61 rose while 363 fell.
Volume was tilted in favour of the losers by a margin of 9:1, with
131.07m shares traded in gainers while 1.18bn shares traded in the
day's losers.

The Index that forms the cash basis for the SPI Futures - the S&P/ASX
200 (XJO)
- dipped rather savagely, losing 118.2 points (3.02%), closing out the
session at 3800 points.

The ASX Small Ordinaries (XSO)
The small end of the market slid in line with its large-cap
counterpart. The Small Ords copped a bit of a hiding, sliding 62.2
points (2.99%), closing out the session at 2017.9 points.

Among the stocks that make up the Small Caps index, 21 index
components finished to the upside, and of the rest, 179 closed lower
for the session.

The 215 stocks which make up the index traded a total of 565.83m units:
volume in the 21 gainers totalling 21.69m shares, with trade totalling
518.04m units in the index's 179 declining components. The major
percentage gainers within the index were

Market Breadth

GICS Industry Indices

Among the 11 industry indices, the news was universally
negative: not a single sector managed to break into the "Win" column.

Since none of the industry sectors registered a gain for the
session, there is no point in burdening ourselves with the internal
behaviour of advancing sectors... on to the losers.

The worst-performed index for the session was Materials
(XMJ),
which dipped 430.8 points (4.22%) to 9775.5 points. The 47 stocks which
make up the index traded a total of 303.62m units; The 45 decliners had
volume traded totalling 301.98m units, and 2 index components rose,
with rising volume amounting to 1.64m shares, The major percentage
decliners within the index were

Fortescue Metals Group (FMG),
-$0.4 (9.83%) to $3.67 on volume of 16.5 million shares;

Alumina Ltd (AWC),
-$0.14 (9.66%) to $1.31 on volume of 14.8 million shares;

Perilya Limited (PEM),
-$0.04 (9.09%) to $0.35 on volume of 1.2 million shares; and

Sundance Resources (SDL),
-$0.02 (9.09%) to $0.15 on volume of 20 million shares.

Just missing out on the wooden spoon was Energy
(XEJ),
which slid 539.7 points (3.72%) to 13968 points. The 23 stocks which
make up the index traded a total of 80.72m units; The 21 decliners had
volume traded totalling 80.12m units, and volume in the lone rising
index component was 0.59m shares, The major percentage decliners within
the index were

Paladin Energy Ltd (PDN),
-$0.35 (7.45%) to $4.35 on volume of 3.1 million shares; and

WorleyParsons Ltd (WOR),
-$1.74 (7.13%) to $22.66 on volume of 1.6 million shares.

Third-to-last amongst the sector indices was Financials
ex Property Trusts (XXJ),
which slid 149.6 points (3.51%) to 4112.6 points. The 25 stocks which
make up the index traded a total of 75.97m units; The 24 decliners had
volume traded totalling 75.46m units, - none of the index components
ended with a gain. The major percentage decliners within the index were